Legislation Would Allow Marijuana Businesses Access to Financial Services
Marijuana Businesses Currently Operate as Cash-only Causing Huge Public Safety Concerns
Today, Senators Jeff Merkley (D-OR), Cory Gardner (R-CO), Michael Bennett (D-CO), Rand Paul (R-KY), and Ron Wyden (D-OR) introduced the Marijuana Business Access to Banking Act, a bill that would allow banks to provide depository and other financial services to state-legal marijuana businesses. Currently, because marijuana is illegal under federal law, both medical and non-medical marijuana businesses are unable to access banking services like any other business. Consequently, many marijuana businesses operate on a cash-only basis, leading to huge public safety issues as businesses become the target of robberies, and are forced to hire armed security to protect their takings.
“One of the motivations for legalizing marijuana is to eliminate the black market and put marijuana in the hands of a legitimate regulated market,” said Michael Collins, Policy Manager at Drug Policy Alliance’s Office of National Affairs. “Whether you are for or against legalization, you have to recognize that having marijuana businesses handling huge amounts of cash with nowhere to deposit the money is a public safety concern that Congress has to tackle.”
“In addition to the obvious public safety concerns cited by federal, state and local law enforcement officials, forcing these businesses to deal exclusively in cash makes it difficult for states to collect taxes, monitor transactions and enforce regulations supported by voters. Allowing these businesses to access basic banking services is a critical step toward letting states regulate marijuana as they see fit without federal interference, a position virtually every serious contender for the 2016 presidential nomination has taken,” said Dan Riffle, Federal Policy Director at Marijuana Policy Project.
Federal money laundering statutes and regulations intended to detect drug trafficking, terrorist activity, and other criminal acts have served as a major obstacle to state-legal marijuana businesses. There are significant public safety concerns associated with businesses that cannot access banking services like other businesses. These companies are unable to accept credit card transactions, and thus operate as cash-only. As a result, operators of marijuana dispensaries, as well as the businesses themselves, have been targeted for robbery by violent criminals. These small businesses sink significant sums of money into security measures like armed guards, floor sensors, panic buttons, because they are terrified of victimization as they handle substantial amounts of cash.
The Marijuana Access to Banking Act would remedy this situation and ensure that state-legal marijuana businesses can utilize the financial services necessary to provide protection and accountability for these businesses.
"The biggest crisis the cannabis industry faces is the lack of access to banking. This is about public safety, fundamental economic fairness and helping small, family run businesses succeed. No licensed, compliant business should have to place themselves, and their community, in danger because they cannot open and maintain a bank account,” said Amy Margolis of the Oregon Cannabis Association. “This legislation allows businesses to flourish, create jobs and maintain accurate bookkeeping, while helping regulatory and enforcement agencies understand how these businesses operate."
Fortunately, Congress has begun to pay attention to this important issue. Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA) introduced the House version of this Senate bill earlier in the year, having also introduced a banking bill the previous session. Last year, the House passed a bipartisan amendment by Representatives Heck (D-WA), Perlmutter (D-CO), Lee (D-CA) and Rohrabacher (R-CA) preventing the Treasury Department from spending any funding to penalize financial institutions that provide financial services to marijuana businesses that are legal under state law. The amendment passed 231 to 192, and is expected to be offered again this year because it is a one-year spending provision. Similarly, Senators Booker (D-NJ), Paul (R-KY), and Gillibrand (D-NY) introduced sweeping medical marijuana legislation in March, the CARERS Act, that tackles the banking issue as well as other important issues such as patient access and protection. The bill already has 11 bipartisan cosponsors. Finally, the Senate Appropriations Committee has voted twice this year in support of medical marijuana.
Update 7/10/2015: Senator Elizabeth Warren (D-MA) has signed onto the bill as well.